A health emergency or a prolonged illness can be a financial disaster, even with good health insurance system.
Health insurance deductibles, emergencycosts, and
other costs of illness can realy cause havoc in a hurry. To curb these problems, A health savings account and funds is one way for health emergency...
How Much of an Emergency Fund Do You Need?
Most advisers would say you should have enough emergency funds saved to cover your family expenses for three to six months. For an older adult, a health emergency might result in the need for long-term care, possibly for the rest of the senior’s life. How much you need for a health emergency and how much you can actually put into an emergency fund will depend on your family size, your income, your health status, and your age. But your first step is to understand your health insurance situation .For a young adult supporting a family, a medical emergency might be much more than just the cost of the illness. Your health emergency could cause a disability that results in loss of income over an extended period. That means you should save enough to cover all your expenses.
Sit down with a financial adviser and figure out what your insurance actually covers and what it doesn't cover. What are your insurance limits? What kind of medical bills might arise that you would be responsible for? Now these also :
What Insurance May Not Cover
How much insurance companies actually pay or accidents, cancer treatment, or surgery depends on what kind of insurance you have, but there are usually limits. Here are some facts to consider:
Emergency room cost. If you have an accident that
requires emergency treatment and you end up in an emergency room outside
your insurance network, you may not be covered. One study found that
HMOs in California denied one out of every six claims for emergency room
costs.
Cost of illness. Most insurance companies have a
cap on how much they will pay for a long-term illness. A recent survey
found that 10 percent of people with cancer
have hit their lifetime cap and are no longer covered by insurance.
Looking forward, however, the new health care reform law will eliminate
caps on lifetime insurance by 2014.
Surgical coverage. You may be surprised at what
your insurance company considers non-covered surgery. There can be a big
gray area between covered “reconstructive” surgery and uncovered
“cosmetic” surgery. Even when surgery is covered, your deductible may be
$500 or more, and you may still be responsible for up to 25 percent or
more of surgical costs, depending on the specifics of your plan.
How to Save for a Health Emergency
There are many different ways to approach starting and adding to your health emergency savings. "You can take advantage of a health savings account if this is offered at your job, but start a general emergency fund also Examples of places to put your emergency fund include an interest-bearing checking or savings account, money market fund, or bond fund. Explain the importance of an emergency fund to your family and get everyone involved in cutting back on unnecessary expenditures.
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